News Archive

"Despite Rule 128's express reference to self-funded plans and imposition of a reporting requirement similar to one the Supreme Court found to be preempted by ERISA in Gobeille, the district court found that neither the reporting requirement nor the dispensing fee requirement were preempted by ERISA." [Central States, Southeast and Southwest Areas Health and Welfare Fund v. McClain, No. 25-3938 (N.D. Ill. Sep. 2, 2025)]  MORE >>

"[The District Court] granted a preliminary injunction preventing beneficiaries from pursuing claims in the Cheyenne River Sioux Tribal Court over disputed life insurance proceeds. The court held that because the benefits arose under an ERISA-governed plan, federal jurisdiction was exclusive and tribal courts lacked authority to adjudicate the dispute." [Metropolitan Life Ins. Co. v. Mundahl, No. 24-3029 (D.S.D. Sep. 19, 2025)]  MORE >>

"In yet another case in the continuing trend of ERISA preemption challenges to state laws regulating PBMs, this decision aligns very closely with Rutledge, but the outcome of these cases depends on specifics -- state laws directly affecting ERISA plan design are more likely to be held preempted." [Cent. States, Se. & Sw. Areas Health & Welfare Fund v. McClain, No. 25-3938 (N.D. Ill. Sept. 2, 2025)]  MORE >>

"[In] the Department's view, the mere fact that the terms of the program contemplate limited situations where an award could be paid after termination of employment does not implicate a deferral of income of the kind contemplated by ERISA section 3(2)(A). Thus, the Department has no reason to believe that the deferred incentive compensation program is an employee benefit pension plan under ERISA section 3(2)(A) as a result of such surrounding circumstances."  MORE >>

"Shortly before a reduction in force took effect, an employee was terminated for cause and informed that she was not eligible for benefits under the employer's ERISA-covered severance pay plan. Rather than file an appeal under the plan's claims procedures, the employee sued under state law ... [T]he First Circuit concluded that the employee had merely attempted an 'end run' around ERISA with allegations that she relied on misleading statements when not claiming benefits under plan procedures. But ERISA provides the exclusive cause of action in precisely such circumstances." [Orabona v. Santander Bank, N.A., No. 24-1905 (1st Cir. Jun. 16, 2025)]  MORE >>

"The plan challenged an Arkansas rule issued under a state [PBM] licensure act and intended to ensure 'fair and reasonable' pharmacy reimbursements and adequate pharmacy networks.... [T]he rule permits the Arkansas insurance commissioner to review the adequacy of pharmacy reimbursement payments made by health plan PBMs.... [T]he court concluded that the plan failed to sufficiently allege that the rule referred to, or had an impermissible connection with, ERISA plans, and therefore dismissed the action." [Cent. States, Se. & Sw. Areas Health & Welfare Fund v. McClain, No. 25-3938 (N.D. Ill. Sept. 2, 2025)]  MORE >>

"[T]he plaintiff is challenging a Tennessee law requiring that 'any willing pharmacy' be included in a prescription drug plan's provider network, including self-insured prescription drug plans governed by ERISA.... [The amicus brief] explains that ERISA preempts the Tennessee law because that law directly interferes with prescription-drug benefit plan design and administration by: [1] Restricting plan sponsors' ability to design pharmacy networks for their plans; and [2] Limiting the ability of plan sponsors to implement effective cost-savings measures for their plans." [McKee Foods Corporation v. BFP Inc., No. 21-0279 (E.D. Tenn. Mar. 31, 2025; on appeal to 6th Cir.)]  MORE >>

"Although this order likely postpones Act 624’s effective date, a preliminary injunction is just that: preliminary. The court’s reasoning for the commerce clause and supremacy clause challenges rests entirely on a preliminary assessment of existing law. But since those challenges are now moving to litigation, both parties must now present evidence for their claims, along with additional legal arguments, which will inform the final decision on Act 624 at trial." [Express Scripts, Inc. v. Arkansas State Board of Pharmacy, No. 25-0520, 25-0524 (E.D. Ark. Jul. 28, 2025)]   MORE >>

"The 10th Circuit's position stands for now ... It will have a ripple effect on other states even though it is the law only for states within the 10th Circuit. Presumably, it means that ERISA does not preempt state rate/pricing mechanisms, but ERISA does preempt state level regulation of plan design or coverage requirements." [PCMA v. Mulready, No. 22-6074 (10th Cir. Aug. 15, 2023; cert pet. denied Jun. 30, 2025, No. 23-1213]   MORE >>

"[The Court] enjoined the provision mandating the inclusion of specific contract terms between PBMs and third-party payors, finding it interferes with fiduciary discretion under ERISA.... The provision requiring all beneficiary payments to count toward a participant's deductible was enjoined. The Court held this mandate directly regulates cost-sharing structures, a core element of ERISA plan design ... [T]he court's detailed and methodical opinion ... offers a robust framework for evaluating the intersection of state PBM laws with federal ERISA and First Amendment protections, and may serve as a persuasive guidepost for other courts reviewing similar legislation across the country. " [Iowa Assoc. of Bus. and Ind. v. Ommen, No. 25-0211 (S.D. Iowa Jul. 21, 2025)]  MORE >>

"With respect to the fact that top hat plans are exempt from ERISA's fiduciary duties, the court said 'The statutory regime shows that Congress 'deliberately omitted' these duties because high-level employees can protect themselves through contract.... The preemption provision thus continues to apply to these plans even though ERISA exempts them from many rules.' " [Aldridge v. Regions Bank, No. 24-5603 (6th Cir. Jul. 17, 2025)]  MORE >>

"By denying review of the Mulready decision, the Supreme Court fostered uncertainty that is resulting in nationwide ramifications.... [A]dvocates against PBM regulation have already challenged PBM laws in Minnesota, Tennessee, Iowa, Oklahoma and Arkansas ... Similar to Rutledge, the outcome of these lawsuits will have significant ripple effects across the country and may influence broader discussions in Congress."  MORE >>

"The Sixth Circuit was called upon to answer two questions: [1] whether ERISA preempts the managers' state law contract-based claims; and [2] whether ERISA Section 502(a)(3) ... allows them to seek the value of their lost claims in the form of equitable surcharge. It answered yes to the former question and no to the latter." [Aldridge v. Regions Bank, No. 24-5603 (6th Cir. Jul. 17, 2025)]  MORE >>

"A recent First Circuit decision ... illustrates how ERISA preemption of state law protects employers where a former employee asserts state law claims alleging improper termination of employment to avoid paying severance benefits. This post describes the benefits of ERISA preemption, provides an overview of the First Circuit decision, and highlights key aspects courts look to in determining whether a severance program is an ERISA plan." [Orabona v. Santander Bank, N.A., No. 24-1905 (1st Cir. Jun. 16, 2025)]  MORE >>

"[E]ven though ERISA exempts top-hat plans from fiduciary duties, it still preempts state-law claims that impose alternative standards of conduct or remedies.... Plaintiffs cannot use Section 1132(a)(3) to seek monetary relief for plan losses, regardless of whether they style the remedy as 'surcharge' or 'equitable compensation.' The court reaffirmed a narrow reading of 'equitable relief.' " [Aldridge v. Regions Bank, No. 24-5603 (6th Cir. Jul. 17, 2025)]  MORE >>

"The decision to leave Mulready as-is re-enforces ERISA preemption and the corresponding limitations of a state's ability to impact employer-sponsored health plans. However, while this decision preserves an ERISA plan sponsor's control over benefit design and network structure, states will likely continue their pursuit of PBM legislation and regulation." [PCMA v. Mulready, No. 22-6074 (10th Cir. Aug. 15, 2023; cert pet. denied Jun. 30, 2025, No. 23-1213]   MORE >>

"Based on the Mulready decision, it appears attempts to force plans to eliminate incentives for mail-order programs, accept any pharmacies into their networks and abide by state regulations to determine network adequacy would not survive an ERISA preemption challenge. This would likely apply to any state regulations that interfere with plan operations or administration. However, other state laws affecting PBMs could survive preemption." [PCMA v. Mulready, No. 22-6074 (10th Cir. Aug. 15, 2023; cert pet. denied Jun. 30, 2025, No. 23-1213]  MORE >>

"A 2023 ruling by the 10th Circuit U.S. Court of Appeals will stand after the nation's highest court denied certiorari in the legal dispute over Oklahoma's Patient's Right to Pharmacy Choice Act, which regulates pharmacy benefit managers (PBMs)." [PCMA v. Mulready, No. 22-6074 (10th Cir. Aug. 15, 2023; cert pet. denied Jun. 30, 2025, No. 23-1213)]  MORE >>

"We can reasonably expect to see increasing turbulence between the states and multi-state plan sponsors (and the vendors who work for them).... [S]teps employers can take to prepare for the storm: [1] Keep senior management aware of ... ongoing developments and the potential impact on health benefits.... [2] Keep up to date on legislative and regulatory developments in the states where you operate.... [3] Assess the impact of enacted legislation on plan design."  MORE >>

"The lawsuit ... contends that the law, Senate File 383, would upend prescription drug coverage in the state and violate the First Amendment by preventing employers from directing workers to some pharmacies over others. The lawsuit also says the Iowa law is in conflict with [ERISA]." [Iowa Association of Business and Industry v. Ommen, No. 25-0211 (S.D. Iowa complaint filed Jun. 23, 2025)]  MORE >>

"[Express Scripts] challenges the Act on constitutional grounds ... as well as alleges that the Act is preempted by the Department of Defense's (DoD) TRICARE. [CVS Pharmacy] challenges the Act on constitutional grounds ... and alleges that it is preempted by both ERISA and the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA)." [Express Scripts, Inc. v. Arkansas State Board of Pharmacy, No. 25-0520 (E.D. Ark. complaint filed May 29, 2025); CVS Pharmacy, Inc. v. Arkansas State Board of Pharmacy, No. 25-0524 (E.D. Ark. complaint filed May 29, 2025)]  MORE >>

"NYCPLR Section 5205(c)(5) allows certain additions to retirement accounts to be exempt from creditor actions, except those made shortly before a judgment claim.... [T]he court found that ERISA's anti-alienation provision preempts this state law exception because it directly conflicts with ERISA's intention to protect retirement funds, including from creditor claims." [Office Create Corp. v. Planet Ent., LLC, No. 24-1879 (2d Cir. Jun. 10, 2025)]  MORE >>

"Express Scripts argues that the bill ... would have the effect of shutting down many pharmacies across [the state].... Express Scripts is bringing the suit to prevent this harm and because it believes 'the law violates multiple provisions of federal law,' the PBM said in the complaint." [Express Scripts, Inc. v. Arkansas State Board of Pharmacy, No. 25-0520 (E.D. Ark. complaint filed May 29, 2025); CVS Pharmacy, Inc. v. Arkansas State Board of Pharmacy, No. 25-0524 (E.D. Ark. complaint filed May 29, 2025)]  MORE >>

"[T]he Florida Office of Insurance Regulation has brought PBM laws and preemption back into the spotlight with its somewhat stringent audit protocols aimed at increasing transparency and accountability within the pharmaceutical supply chain, a trend in state oversight of PBMs that may seem attractive to an increasing number of states."  MORE >>

"The court conceded that the administrative proceeding was initiated as a reaction to BlueCross's denial of B.C.'s claims. But the court was persuaded that the claims denial was not the basis for the state administrative proceeding, but instead merely provided evidence to the Insurance Commissioner that BlueCross was violating New Hampshire insurance law." [Bluecross Blueshield of Tennessee, Inc. v. Nicolopoulos, No. 24-5307 (6th Cir. May 8, 2025)]  MORE >>